Prime Minister Takashi said the government is adjusting a proposal to cut the food consumption tax from 8% [1] to 1% [1].
The proposed reduction aims to fulfill campaign promises of tax relief and provide rapid support to consumers facing economic pressure. By targeting food costs and low-income households, the administration seeks to stabilize the cost of living for the most vulnerable populations.
Takashi said the plan on June 17, 2026 [1], during a bipartisan National Conference working meeting while visiting France [1]. The government intends for the reduced rate of 1% [1] to take effect in April 2027 [1] and remain in place for two years [1].
In addition to the broad tax cut, the government is considering a 1% [1] income-based benefit specifically for low-income households. This dual approach is designed to ensure that assistance is both widespread and targeted.
While the current proposal focuses on a 1% [1] rate, some reports indicate the Prime Minister's original campaign promise was a 0% tax on food [2]. The government is now coordinating the final details of the plan based on a proposal from the Tax Committee Chair [1].
Takashi said he wants to ensure the plan provides both speed and sufficiency. He said he will closely monitor the progress of the adjustments as the government moves toward an interim summary of the policy [1].
“The government is adjusting a proposal to cut the food consumption tax from 8% to 1%.”
This policy shift represents a significant departure from standard consumption tax structures in Japan. By slashing the rate from 8% to 1%, the administration is prioritizing immediate purchasing power over long-term tax revenue. The inclusion of a targeted income-based benefit suggests the government recognizes that a flat tax cut may not be sufficient to protect the lowest earners from inflation.
